Nonprofit organizations operate under different financial rules and regulations compared to for-profit businesses.
As such, nonprofit accounting requires unique strategies, practices, and tools to effectively manage financial activities.
In this blog post, we will explore nonprofit accounting statistics to provide insights and information on the state of nonprofit accounting today.
Key Nonprofit Accounting Statistics 2023 – MY Choice
- According to the National Center for Charitable Statistics, there are over 1.5 million nonprofit organizations in the United States alone.
- Nonprofit organizations account for approximately 5.5% of the US GDP.
- The nonprofit sector employs around 10% of the US workforce, making it the third-largest employer in the country.
- In 2019, the total revenue of US nonprofits was over $2.9 trillion.
- The majority of nonprofit revenue comes from individual contributions, which accounted for 69% of all charitable giving in 2020.
- In 2020, religious organizations received the largest share of charitable giving at 28%.
- According to a survey by the Nonprofit Finance Fund, 61% of nonprofit organizations reported that they did not have enough unrestricted funds to operate for more than three months.
- The Sarbanes-Oxley Act of 2002, which established accounting and reporting requirements for public companies, also applies to some nonprofit organizations that receive federal funding.
- The Financial Accounting Standards Board (FASB) sets accounting standards for nonprofit organizations in the US.
- In recent years, there has been increased scrutiny of nonprofit accounting practices, particularly related to transparency and accountability. As a result, many nonprofit organizations have implemented stricter accounting and reporting procedures to ensure compliance with regulations and maintain public trust.
Nonprofit Accounting Statistics
Table 1: Nonprofit Accounting Benefits and Usage Statistics
| Statistics | Value |
|---|---|
| Percentage of people who subsequently purchase a product that benefits the charity | 40% |
| Percentage of Pinterest usage that takes place on mobile devices | 75% |
| Percentage of people who would increase their usage of mobile payments if discounts or coupons were offered | 79% |
Table 2: Nonprofit Accounting Market and Adoption Statistics
| Statistics | Value |
|---|---|
| Percentage of marketers who report that Facebook is critical or important to their business | 42% |
| Percentage of social marketers who use Facebook to advertise regularly | 93% |
| Percentage of direct marketing campaigns that succeed | 40% |
| Percentage of direct marketing campaigns that fail if shared fewer than 2 times | 97% |
| Percentage of nonprofit social media activity that happens on mobile | 58% |
| Mobile phone adoption rate for US adults | 95% |
| Smartphone adoption rate for US adults | 81% |
| Percentage of US donors who do not have a landline | 51% |
Table 3: Latest Nonprofit Accounting Statistics
| Statistics | Value |
|---|---|
| Charitable giving as a percentage of gross domestic product in 2016 | 2.1% |
| Percentage of private foundation funding that goes to Education | 26% |
| Percentage of private foundation funding that goes to Health | 23% |
| Percentage of private foundation funding that goes to Community and Economic Development | 13% |
| Percentage of private foundation funding that goes to Human Services | 13% |
| Percentage of private foundation funding that goes to Arts and Culture | 9% |
| Percentage of nonprofits accounted for by Churches, schools, and foundations | Almost 40% |
| Percentage of organizations that are classic civil, social, and business engagement organizations | About 15% |
| Percentage of grant dollars from US funders that were awarded for international purposes | 23% |
| Percentage of high net worth households that give to charity | Approximately 91% |
| Percentage of private foundation funding that directly impacts economically disadvantaged people | 29% |
| Percentage of private foundation funding that directly impacts children and youth | 21% |
| Percentage of private foundation funding that directly impacts women and girls | 8% |
| Percentage of private foundation funding that directly impacts religious groups | 3% |
| Top four volunteer areas by percentage | Religious (34.1%), Educational (26%), Social Service (14.9%), Health (7.3%) |
| Percentage of donors worldwide who give to nonprofits located outside of their country of residence | 31% |
| Percentage of private giving that is from individuals | 17% |
| Number of Americans who volunteer their time, talents, and energy to making a difference | Approximately 63 million (25% of the adult population) |
| Percentage of all charities that rely on contributions for the majority of their revenue | 53% |
| Percentage of public charities whose annual revenue is $0 – $99K | 76% |
| Percentage of public charities whose annual revenue is $100 – $499K | 13% |
| Percentage of public charities whose annual revenue is $500 – $999K | 3% |
| Percentage of public charities whose annual revenue is $1M – $4.9M | 5% |
| Percentage of public charities whose annual revenue is >$5M | 3% |
| Percentage of revenue that comes from program services for 32% of charities | Majority |
| Percentage of annual giving that occurs in December | 30% |
- The nonprofit sector represents 10.2% of the workforce in the US. (source: National Council of Nonprofits)
- In 2019, nonprofits in the US had $2.01 trillion in revenue. (source: National Center for Charitable Statistics)
- The top 1% of nonprofits in the US account for 86% of the sector’s revenue. (source: Urban Institute)
- Nonprofits in the US employ more than 12 million people. (source: National Council of Nonprofits)
- 88% of nonprofits in the US have an annual budget of less than $1 million. (source: National Council of Nonprofits)
- Nonprofits in the US receive 10% of all charitable giving. (source: Giving USA)
Nonprofit Accounting Facts
- Nonprofits have to file Form 990 with the IRS annually to maintain their tax-exempt status.
- Nonprofits can be organized as corporations, trusts, or associations.
- Nonprofits can engage in lobbying and advocacy as long as it does not constitute a substantial part of their activities.
- Nonprofits are required to maintain proper financial records and disclose their financial information to the public.
Nonprofit Accounting Benefits
- Nonprofits provide essential services to underserved communities.
- Nonprofits contribute to economic development by creating jobs and stimulating local economies.
- Nonprofits promote social change by advocating for public policies that benefit marginalized groups.
- Nonprofits provide opportunities for volunteers to give back to their communities.
Nonprofit Accounting Trends
- Nonprofits are increasingly relying on technology to manage their operations and engage with their stakeholders.
- Nonprofits are diversifying their revenue streams to reduce their dependence on donations.
- Nonprofits are adopting outcome-based metrics to measure their impact and demonstrate accountability to their funders and stakeholders.
Nonprofit Accounting Adoption
- 83% of nonprofits in the US use accounting software to manage their finances. (source: Nonprofit Technology Network)
- QuickBooks is the most commonly used accounting software by nonprofits in the US. (source: TechSoup)
- 46% of nonprofits in the US use cloud-based accounting software. (source: Nonprofit Technology Network)
Nonprofit Accounting Market Analysis
- The global nonprofit software market is projected to reach $3.94 billion by 2026, growing at a CAGR of 10.1%. (source: MarketsandMarkets)
- The US nonprofit software market is expected to reach $5.5 billion by 2025, growing at a CAGR of 9.7%. (source: Verified Market Research)
- The major players in the nonprofit software market include Blackbaud, Salesforce, CiviCRM, DonorPerfect, and NeonCRM.
Nonprofit Accounting Demographics
- Women make up 75% of the nonprofit workforce in the US. (source: Nonprofit Quarterly)
- The average age of nonprofit employees in the US is 45. (source: National Council of Nonprofits)
- Nonprofit employees are more likely to have a college degree than the overall US workforce. (source: National Council of Nonprofits)
Nonprofit Accounting Software
- Nonprofit accounting software typically includes features such as fund accounting, grant management, and donor management.
- Cloud-based nonprofit accounting software offers advantages such as accessibility, scalability, and cost-effectiveness.
Nonprofit Accounting Stats
- Nonprofits have unique accounting rules and regulations that are different from for-profit businesses.
- Nonprofit accounting is designed to ensure that nonprofits can effectively and accurately track their finances, comply with regulations, and make informed decisions.
- Nonprofit organizations are required to keep detailed financial records and report their finances to various stakeholders, including donors, grantors, and regulatory agencies.
Nonprofit Financial Management Stats
- 89% of nonprofit leaders are confident in their organization’s financial stability.
- 57% of nonprofits use spreadsheets to manage their finances.
- 44% of nonprofit leaders report difficulty in accessing financial information in a timely manner.
- 30% of nonprofits report insufficient financial management as a significant challenge.
Financial Reporting Stats
- Nonprofits are required to file an annual report with the IRS using Form 990.
- The Form 990 is a comprehensive tax document that requires nonprofits to disclose their financial activities, governance practices, and program accomplishments.
- The IRS reviews Form 990 data to ensure that nonprofits are complying with regulations and best practices.
Donor Management Stats
- Donor retention rates for nonprofits are 45%.
- 58% of nonprofits use fundraising software to manage donor relationships.
- 36% of donors say that their decision to give to a nonprofit is influenced by the organization’s transparency around financial management.
Budgeting and Forecasting
- 73% of nonprofit leaders believe that budgeting is critical to their organization’s success.
- 63% of nonprofits use spreadsheets to create their budgets.
- 54% of nonprofit leaders say that they do not have the budgeting tools they need to effectively manage their finances.
Fundraising Stats
- The top three sources of nonprofit revenue are individual donations, government grants, and foundation grants.
- In 2020, charitable giving in the U.S. totaled $471.44 billion.
- Online giving grew by 21% in 2020.
Accounting Software
- 67% of nonprofits use accounting software to manage their finances.
- The top accounting software used by nonprofits are QuickBooks, NetSuite, and Sage Intacct.
- Nonprofits using cloud-based accounting software grew by 26% in 2020.
Compliance Stats
- Nonprofits are subject to various regulations, including the Sarbanes-Oxley Act, the Uniform Guidance, and state-specific regulations.
- Failure to comply with regulations can result in penalties, fines, and damage to the organization’s reputation.
- 60% of nonprofits have policies in place to ensure compliance with regulations.
Audits Stats
- Nonprofits are required to undergo an audit if they receive more than $750,000 in annual revenue.
- An audit is a review of a nonprofit’s financial records to ensure that they are accurate and comply with regulations.
- Nonprofits that receive federal funding are required to undergo a single audit, which includes a review of financial records and compliance with federal regulations.
